How to Choose Daycare Billing Software (Complete Guide)
Stop chasing payments and creating invoices manually. Here's everything you need to know about automating your daycare billing.
The True Cost of Manual Billing
If you're still doing billing by hand - creating invoices in Word, tracking payments in spreadsheets, following up via text - you're losing hours every week. The hidden costs:
- Time - 5-10 hours per month on invoice creation alone
- Late payments - Without automation, 30-40% of families pay late
- Errors - Manual calculations lead to disputes and corrections
- Cash flow - Inconsistent payment timing hurts your business
What Good Billing Software Does
Automated Invoice Generation
Set up billing plans once (weekly, biweekly, monthly) and invoices generate automatically. No more creating them one by one.
Online Payments
Parents pay with a click using credit/debit cards. Money hits your bank account next business day. No checks to deposit, no cash to handle.
Payment Reminders
Automatic reminders before due dates and follow-ups for late payments. Stop being the bad guy - let the software do it.
Late Fee Calculation
Configure your late pickup fees and payment late fees. The system calculates and applies them automatically.
Financial Reports
See revenue, outstanding balances, and payment history at a glance. Export for your accountant with one click.
Key Features to Compare
When evaluating daycare billing software, focus on these features:
| Feature | Must Have | Nice to Have |
|---|---|---|
| Automated invoicing | ||
| Online card payments | ||
| Payment reminders | ||
| Late fee automation | ||
| PDF invoice export | ||
| ACH/bank payments | ||
| Multiple payment plans | ||
| QuickBooks integration |
Watch Out for Hidden Fees
The billing software market is full of hidden costs. Here's what to look for:
Per-Child Fees
Some software charges per enrolled child. At $3-5 per child, a center with 50 kids pays $150-250/month just for the software - and it goes up as you grow.
Payment Processing Markups
Standard credit card processing is about 2.9% + 30¢. Some daycare software adds their own fee on top - an extra 0.5-1% that adds up fast.
Feature Paywalls
"Billing included!" But automated invoices? That's a premium feature. Online payments? Extra module. Read the fine print.
Questions to Ask Before Buying
- What's the total monthly cost for my center size?
- Are there per-child or per-transaction fees?
- What payment processing fees will parents pay?
- Can I bill on custom schedules (not just weekly/monthly)?
- How are late pickup fees handled?
- Can I accept split payments from divorced families?
- What reports can I generate for my accountant?
- Is there a free trial to test the billing features?
Making the Switch
Switching billing systems mid-year feels scary, but it's easier than you think:
- Pick a billing cycle start - Usually the 1st of a month
- Set up billing plans - Configure rates for each family
- Notify parents - Explain the new payment process
- Send first invoices - Use the new system from day one
Most centers complete the switch in a week. The first month has questions; by month two, it's smooth sailing.
The ROI of Billing Software
Good billing software pays for itself quickly:
- 5-10 hours saved per month on invoice creation
- 50% reduction in late payments
- Fewer disputes with clear digital records
- Better cash flow with predictable payment timing
At even modest hourly rates, the time savings alone justify the cost. The reduction in late payments is pure profit.